Non-Resident Tax on Armenian Real Estate: What Foreign Investors Pay on Rental Income and Capital Gains

If you own or plan to purchase real estate in Armenia but live abroad, understanding your ongoing tax obligations is essential. Most guides focus on the purchase process itself — how to find a property, register the title, and obtain a residence permit. This article fills a different gap: the taxes you will actually pay as a non-resident property owner, from annual holding costs and rental income to the capital gains consequences when you eventually sell.

Whether you are an overseas Armenian, a digital nomad renting out a Yerevan apartment, or a foreign investor building a portfolio in the region, what follows is a practical guide grounded in the current Armenian Tax Code.

Who counts as a non-resident under Armenian tax law?

Under Armenian tax law, your tax residency depends on physical presence — not your citizenship or immigration status. You are considered a tax resident if you spend 183 days or more in Armenia during any consecutive 12-month period starting or ending within the tax year. If you fall below that threshold, you are a non-resident for tax purposes, even if you hold an Armenian residence permit.

There is one exception: if your center of vital interests — your family home or primary economic activity — is in Armenia, you can qualify as a tax resident even with fewer than 183 days of physical presence. This matters because tax residents are taxed on worldwide income, while non-residents are only taxed on Armenian-source income such as rental income from Armenian property or gains from selling Armenian real estate.

For the rest of this article, “non-resident” means a foreign national who does not meet the 183-day threshold and whose center of vital interests is outside Armenia.

Tax on rental income from Armenian property

If you rent out your Armenian property while living abroad, the rental income is taxed at a flat 10% rate under Armenian tax law (Tax Code, Articles 60–64). The rate is the same for both residents and non-residents — the difference lies in how the tax is collected and whether you must file a return.

How collection works: tax agent vs. self-reporting

When your tenant is a legal entity — an Armenian LLC, joint-stock company, or permanent establishment — that entity acts as a tax agent. It withholds 10% of the gross rent before paying you and remits the amount to the State Revenue Committee on your behalf. You receive 90% of the agreed rent, and the tax obligation is handled automatically.

When your tenant is a private individual, there is no tax agent and no automatic withholding. In that case, you — the property owner — must self-report the rental income and pay the 10% tax directly to the State Revenue Committee.

Since 1 July 2026, the moment rental income counts as received follows the cash-method rules of Tax Code Article 132(2), applied to individuals by new Article 142(2) (law HO-234-N). Besides an actual payment, settlement in other property, a mutual offset of debts, or a restructuring or novation of the debt can count as receipt.

The AMD 60,000,000 threshold

If your total annual rental income from Armenian property exceeds AMD 60,000,000 (~USD 151,900), an additional 10% applies to the excess — effectively bringing the marginal rate to 20% on income above that threshold. For most individual landlords renting one or two apartments, the AMD 60,000,000 ceiling will not be reached. However, owners of multiple units or high-value commercial properties should plan for the higher rate.

Capital gains when you sell — how the rate depends on the buyer

This is where Armenian tax law differs most from what many foreign investors expect. The capital gains tax on a property sale is not a single fixed rate — it depends on who the buyer is and whether the seller qualifies as a developer or constructor under the Tax Code.

Scenario 1: Selling to another private individual — generally exempt

When a non-resident individual sells personal property (not used for business purposes) to another private individual, the transaction is generally exempt from income tax. Under Armenian tax law, income from the sale of personal property between natural persons is classified as “deducted income,” and the practical result is no tax collected — no tax agent is present to withhold, and no tax obligation arises for personal-property sales.

This exemption does not apply if the property is recharacterized as part of “entrepreneurial activity” — for example, if you have been buying and reselling properties as a regular business. Passive investors selling a single apartment or house they purchased for personal use will typically qualify for the exemption.

Scenario 2: Selling to a legal entity or permanent establishment — 10% withholding

When the buyer is an Armenian LLC, CJSC, or any other entity that qualifies as a tax agent under the Tax Code, the buyer generally withholds 10% of the gross taxable sale proceeds and remits it to the State Revenue Committee (Tax Code, Article 150(9)), subject to statutory exemptions and special rules. The 10% applies to the whole sale income, not to a calculated net gain after deducting the original purchase price.

One important exception: under Armenian tax law, income from the alienation of land — regardless of the land’s designated purpose — is classified as deducted income and is not subject to the 10% withholding, even when the buyer is a tax agent.This distinction matters for transactions involving a building on a land plot, where the land and building components may be treated separately.

Scenario 3: Developer or constructor sales — 20%

If the seller qualifies as a “constructor” under the Tax Code — a defined term referring to someone who builds or develops multi-apartment buildings, subdivided premises, or similar projects — the personal-property exemption does not apply. Instead, income from the alienation of buildings, apartments, and other premises by a constructor is taxed at 20%. This rate applies regardless of whether the buyer is an individual or a legal entity.

Passive investors who purchase an existing apartment for personal use are not constructors. This category targets developers who build and sell as a business.

Property tax — annual obligations for foreign owners

Every property owner in Armenia — whether Armenian or foreign, resident or non-resident — pays annual immovable property tax. There is no preferential or punitive rate for foreigners. The tax is governed by Tax Code Articles 224–238, and the rate schedule is set by Article 229.

How rates are calculated

Property tax is based on the “approximated market value” of the property — a figure calculated by the State Committee of Real Estate Cadastre’s algorithm, not the old cadastral value or the actual sale price. You can check the taxable base for any specific property at cadastre.am. Rates are progressive. For an apartment, the marginal rate rises from 0.05% on the first AMD 10,000,000 of taxable value to 1.5% on the part above AMD 200,000,000, and the top band is not a flat 1.5%: above AMD 200,000,000 the tax is AMD 1,326,000 plus 1.5% of the excess. For an individual house or garden cottage, the top band is AMD 1,223,500 plus 1.5% of the excess (Tax Code Article 229(1)(3)–(4)). Rates for other property types — garages, industrial premises, commercial buildings, and non-agricultural land — are set separately under the Tax Code.

The 2026 full-rate milestone

Armenia introduced a five-year phase-in for the market-value-based property tax starting in 2021 (Tax Code, Article 233). The phase-in percentages were 25%, 30%, 35%, 50%, and 75% of the calculated tax from 2021 through 2025, respectively. From 1 January 2026, the full 100% rate applies. This represents a significant increase in annual holding costs, especially for premium properties in central Yerevan.

To illustrate: an apartment in Yerevan’s Kentron (Center) district with an approximated market value of AMD 200,000,000 (~USD 506,000) now carries an annual property tax exceeding AMD 1,300,000 (~USD 3,300) — a figure that was negligible under the pre-2021 cadastral-value regime.

What is completely exempt: gifts, inheritance, and more

Armenia does not impose a separate inheritance tax or gift tax on real estate. If you receive Armenian property as a gift from a family member or inherit it, the transfer is classified as “deducted income” under the Tax Code and is not subject to income tax. This applies equally to non-residents inheriting or receiving Armenian real estate as gifts.

There is one carve-out to be aware of: property described as “constructor” property under the Tax Code — essentially, buildings or apartments received as a gift from someone who qualifies as a developer-constructor — may not qualify for the full exemption. In practice, this affects developer-to-developer transfers, not typical family inheritance.

Other exemptions relevant to non-resident property owners include the personal-property capital gains exemption (discussed above), and the fact that vacant, unrented property does not trigger any additional income tax — you pay only the annual property tax on an unoccupied unit.

How to comply — registration, filing, and payment deadlines

Do you need to register a business?

No. Foreign individuals can earn rental income from Armenian property without registering a permanent establishment (PE) or forming an Armenian LLC. You do, however, need a Taxpayer Identification Number (TIN), which you can obtain online through the State Revenue Committee’s portal or in person with your passport.

Rental income reporting

When you begin renting out your property, you must submit a rental statement to the State Revenue Committee within five days of the lease start date. If your tenant is a legal entity (a corporate tenant), the withholding and remittance to the SRC is handled by the tenant as a tax agent — you generally do not need to file a separate income tax return for that income. If your tenant is a private individual, you must self-report the rental income and pay the 10% tax.

Annual filing deadline

Non-residents with self-reported Armenian-source income typically file an annual declaration by the following year’s deadline through the SRC portal. Optional monthly payments at 10% of gross rental income are available for those who prefer to spread the obligation across the year. Consult a tax advisor to confirm the specific filing deadline applicable to your situation, as deadlines may vary depending on the income type and source.

Records you should keep

Maintain copies of all lease agreements, income records (invoices or receipts), bank statements showing rent payments, tax declarations, and proof of tax payments for at least five years. Keep your cadastral extracts and TIN documentation accessible as well — you may need them for any future sale or audit.

Double tax treaties and your home country

Armenia maintains approximately 51 double tax treaties with countries around the world. These treaties affect how your home country treats the taxes you pay in Armenia. In most Armenian DTTs, income from immovable property (rental income and capital gains from real estate) is taxable in the country where the property is located — meaning Armenia retains its right to tax the income, and your home country typically provides a credit or exemption to avoid double taxation.

A few treaty partners may offer reduced withholding or preferential treatment. For example, the Armenia–UAE treaty includes provisions that may reduce the source-state tax on certain types of passive income. However, the specifics vary by treaty and by income type. If you are a tax resident of a country with an Armenian DTT, review the specific treaty text or consult a tax advisor to understand how your Armenian property income should be reported in both jurisdictions.

What if you own through a foreign company?

Foreign companies that own Armenian real estate are subject to 10% withholding tax on rental and lease income from Armenian sources when paid by a tax agent. Capital gains on the sale of Armenian property by a non-resident corporate entity are also taxed at 10% on the net gain (sale price minus documented acquisition cost).

Foreign companies can register as Armenian taxpayers (obtain a TIN) without establishing a branch or representative office in Armenia, provided their activities do not create a permanent establishment. For investors considering whether to hold property individually or through an entity — whether an Armenian LLC or a foreign company — the decision depends on several factors including your home country’s tax treatment, the scale of your portfolio, and your long-term plans. Our team at Vardanyan & Partners can help you evaluate the most efficient structure for your tax situation in Armenia.

Frequently asked questions

Conclusion

Armenia’s tax treatment of non-resident property owners is relatively straightforward once you understand the key distinctions: who your tenant and buyer are matters as much as the tax rates themselves. Rental income is taxed at 10% (with a higher marginal rate above AMD 60,000,000), capital gains depend on the buyer type, and annual property tax applies equally to all owners at the full 100% rate from 2026 onward.

The absence of inheritance and gift taxes, combined with the personal-property capital gains exemption for individual-to-individual sales, makes Armenia a relatively favorable jurisdiction for passive property investors. If you are considering purchasing real estate in Armenia or need to ensure your current ownership structure is tax-efficient, our team can advise on both the Armenian and cross-border tax implications.

Last updated: May 4, 2026